Hollywood Video Stores’ Tampa Bankruptcy

Movie Gallery Inc., the operator of Hollywood Video Stores is seeking bankruptcy protection for the second time. With dwindling sales revenue, the nation’s second largest video store chain is closing 9 of its 16 remaining stores in the Central Florida area. This means the closure of all Tampa Bay area stores with the exception of one  Hollywood Video at 13184 U.S. 301 S in Riverview.

In line with the impending bankruptcy process, a liquidation sale will be carried out. However, if you have an outstanding gift card, the company gave the assurance that these will be honored.

Movie Gallery was founded in Wilsonville, Oregon and had only 8 months ago emerged from bankruptcy filed in 2007. On Wednesday, it filed for Chapter 11 bankruptcy protection in Richmond, Va. This time, it will close 805 of its stores nationwide, bringing the total number of Hollywood Video stores and Game Crazy locations still open to 1,900 from what used to be more than 4,600 at its highest.

Movie Gallery has owned Hollywood Video since buying it over for $1.2 billion in 2005. It in turn is owned by Sopris Capital and Aspen Advisors who were creditors that were allowed ownership of the company during the previous bankruptcy. In the fourth quarter of last year, Movie Gallery reported a net loss of $129 million as substantially lower sales took its toll. Yearly sales fell by $0.6 billion to $1.4 billion in 2009 from $2 billion the year before.

Buying videos from videos stores was a common activity about 10 years or so ago. In recent times, however, the video retail business has had to face intense competition in the form of mail order DVD rental services and other forms of video business. Netflix is a company that runs a popular mail order DVD rental service. Then there are also other forms of competition for the movie going public such as RedBox or Blockbuster Video that maintain kiosks at supermarkets and discount stores offering $1 a night movie rentals.

With such competition and the weak economy, Movie Gallery has suffered its huge losses leading to their bankruptcy filing. But with bankruptcy protection, there is every chance for Movie Gallery’s business survival.

If your business is not doing well, consider applying for bankruptcy protection. It is your right under the law and will afford you the opportunity to wipe your slate clean of your debts so that you can start anew in your business.

Call our Tampa bankruptcy attorneys at (813) 200-4133 for a free consultation on your business.